How I Do: Dollars & Sense

Disclaimer: I don't know shit about money in general. I know everything about my money in particular. I mentioned my interest in personal finance a few posts back, and some of you guys asked me for a little more. Here's what I have learned and what may be helpful to you as you examine your financial situation and attempt to create healthy financial habits. This is what I "know" and this is how I money:

You need to save money. 
You just have to. I am not a PF blogger so I won’t go into all the specs about how much by what age in what kind of accounts. But you need to save money in a savings account that you cannot easily withdraw from. 

Don’t think you can save? You’re wrong. I promise you. No matter how little you make or how many expenses you have, you can save some of it every month. Five bucks a paycheck counts. Yes, every month. Don’t believe me? That’s because you spend too much on things you don’t need. Don’t believe that either? Track your spending for one month and your head will spin!

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How I Do: I have an emergency fund which, knock on wood, has not been touched since I fully funded it. I have a Roth IRA, because I do not have retirement through my company. My retirement fund is small, but it’s there and it grows every single month. I have a general savings account, which, when it’s bigger, will be broken off into specific funds {travel, new car, property, etc.}

I automatically transfer money into my IRA every month. No ifs, ands, or buts about that money. I look at where my paychecks and monthly bills fall, leave myself enough cash to cover any credit cards {like my Target card, which gets paid in full every month}, an amount I’m comfortable with as a buffer, and shove the rest into general savings. This works out to at least 10% of my net income. Some months I'm very fortunate to put a heck of a lot more in there. Sometimes I only manage 10% total into savings. Life happens.

You need a budget. 
You need a budget. You need a budget.
Budgeting is not scary. Budget isn’t a dirty word. Budgeting doesn’t mean staying in on weekends and buying everything at the dollar store. It means deciding what is important to spend your money on this week/month and prioritizing so that you can spend knowledgeably and wisely.

There are different ways of budgeting. Try a couple and find which one works for you.

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How I Do: I tracked my spending for nearly a year before I finally realized I needed to budget. I looked at months’ worth of data to see what my typical monthly spending was in each category, and then created my budget based on that. Some categories I slashed because they were wastes of money. It took a few months to get it all right, and it still misses the mark a little sometimes. But it works to help me stay in control and aware of the state of my finances.

I plan ahead as best I can too. If I know a costly birthday event is coming up in a few months, for example, I make a note of it so when I write the month’s budget, I can account for that spending. I take inventory of what I have and need before setting health, beauty, home, and clothing budgets. I look ahead to holidays, birthdays, travel, races, and big purchases and then pull back in other areas of my budget to make sure I can spend the money without stressing.

You need a system. 
I don’t care what it is. You can use YNAB. You can use You can use a pencil and paper. You can use spreadsheets and documents, like I do. You can use smartphone apps, like I do. But you need to figure out a system that works for you and that you can stick with.

How I Do: I track all my spending in an iPhone app called iSpending. It’s the most basic money app I’ve ever seen, and that’s why I love it. All it does is help you see what you’re spending in each category each month.

I take that data and put it into a spreadsheet every month that I can keep track of and refer back to easily. Here’s the gist of my spreadsheet — I’m just showing the categories, no figures, because, well. Guess.
{If you'd like to see another post detailing how I come up with figures for each category, how I itemize purchases, my credit card system, and/or what I mean by Cable/PSE&G {home electric & gas} Funds, just let me know!}

I also use a Google Calendar to keep track of everything in and out. Each monthly bill is set to reoccur every month. I add in things like when I expect extra income from side work {I do not budget with this money, though.} and my Target or AmEx {travel rewards!} credit card bills. This helps me see everything at a glance and keep better track of where I am in each pay cycle.

You need to be informed. 
You need to do your research about debt, credit cards, investing, retirement, the housing market, the rental market, legal issues in banking, identity theft protection, and any other financial implication that may apply to you like children’s college funds, financial aid, scholarships and grants, personal loans, insurance, and salary negotiation. You need to be able to make smart and informed financial decisions. You need to be able to take all the information and financial advice out there, condense it, process it, and use it to inform your specific financial plans, goals, and systems. Don't blindly follow the advice of a financier who doesn't know you or your situation. Personal finance is personal.

How I Do: All the personal finance bloggers linked in this post.

This is the sentence that started this whole thing, when in a recent confessions post I said what I thought of the people who say renting is “throwing money away” and I should be trying to buy a house instead. EL OH EL guys. Seriously. Can we let this myth die already? PLEASE, PLEASE, PLEASE. Also, this.

There are dozens of other fantastic personal finance blogs out there. Find them by visiting the ones I've linked here and checking on their blog rolls or clicking through their comments.

Thanks for sticking with me all the way through this, chickadees. PF is something that I find so interesting and love talking about. And I'm so saddened by the number of people my age who are just drowning in debt, are terrified to make any future plans, and who feel completely beaten down by money concepts. Hopefully, some of what I've learned can help you as much as it's helped me change so much for the better over the last couple years.

Thanks to the handful of you who said in comments or emails to me that you wanted to see a post on personal finance. Otherwise, I never would have written this post, because I know a lot of people are still afraid to talk about money. Personally, I believe the more we talk about it, the less scary is has to be! So thanks for speaking up and telling me what you want to see. I'm happy to oblige, obviously.  :)

Anything I didn't cover that you want my thoughts on? {Please note that this is basic personal finance info. I am NOT your gal if you want to talk about investing, but some of the ladies above certainly are!} What do you think of all this? Let me know!

(image via)


  1. thank you SO MUCH for sharing this, i can't even begin to say how much i love it.
    im sure you can tell from my blog that i have a serious shopping problem! lol. not funny, kristen. anywho. it used to be 10 times worse and i am not exaggerating. i racked up so much debt so fast it was ludicrous. i went to all kinds of therapy, worked 3 jobs and paid 90% of it off. then i moved overseas. my husband is such a saver its not even funny. we are the complete opposite. and thank goodness for that otherwise we would be broke as broke can be. we did buy a house, because thats what i wanted, though i never thought i would / be able to. i still want to do other things with my life, and lately, after writing down my monthly shopping expenses, i have realised how much money i am wasting on clothes. i know its stupid and all that, but i really enjoy shopping. duh. i know i still spent more this month than most people do, but i spent 70% less this month (so far) than i did the last month. and what i spent last month, or the month before i could have paid for 2 tickets to NYC for hubby and me. yup. Talk about a slap in the face and waking me up. I don't think I will stop shopping anytime soon, but it sure did open my eyes, and i really really appreciate this post - we have a savings account but husband and i just talked about opening another that is 'untouchable' for bills and the like (we transfer in and out a lot) but more for big trips and such if that makes sense. anywho, longest comment ever, right?!

  2. Great post, thanks for this! I have been looking for an app to track spending for a while so I will immediately download iSpending.

  3. YESSS. This is an awesome post. My fiance and I have been trying to set up a budget but we can never stick to it for longer than a month.. then it gets out of control.. then we try again.. then it gets out of control again... it's a vicious cycle.

  4. I'm a major geek and I love talking and learned about personal finance. I think its so interesting and exciting.
    I think the best thing about PF is that its personal, and you get to do what works for you and your situation. I do think everyone can save each month--like you said, even if its 5.00. Putting something, anything away is a must do every single month.
    Its hard starting out b/c you are trying to build your life and you have this small pile of money that you could be spending, but you don't it just sits there.
    Retirement---ugh. It stresses me out b/c what if we don't have enough money--what do you do?
    But, again, putting a bit away each month will make the difference in the long run.

  5. Great post! I'm not the best at budgeting but I like my money in my accounts where I can check on them daily from online. That being said, I buy so many random things online its not even funny. That means that when I see money going down at some point I just shut off all spending and literally would live off of nothing for the rest of the month. Its insanity and needs to stop. I need a system, I just cant figure out what the hell kind of system I do need. Thanks for this!

  6. LOVE THIS!!!! I tend to budget the old school way with pen and paper. Mainly because it's easier. I'd prefer to switch but just haven't found something that works for me. Saving this so I can check out all of these links! And yes, I'd totally be interested in how you come up with the amounts for each category!

  7. This is an absolutely wonderful post that I cannot wait to share with my husband over Christmas. We do OK with spending but I know we could absolutely do WAY better. Some great tips here!!!


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